ECONOMICS OF

BUSINESS AND LAW

Research into "Economics of Business" applies microeconomic concepts to management problems. Among these economic tools are contract theory, game theory, bounded rationality, and the experimental test of theoretical insights. Research into "Law and Economics" uses the same tools to analyze the impact of legal institutions on interactive behavior. The results of this positive analysis can be used to derive recommendations regarding the design of better laws.

Managers have to cope with internal incentives, with external relations to competitors and factor suppliers, and with the design of the legal environment. Therefore, the research projects can be grouped into three categories: organization, markets, and politics.